Mere Board Resolution doesn’t crystallize a liability for Expenditure on discontinuance of Clinics

Kaya Ltd Vs CIT (ITAT Mumbai)

The Income Tax Appellate Tribunal (ITAT) Mumbai, in the case of Kaya Ltd Vs Commissioner of Income Tax (CIT), made a significant ruling concerning the disallowance of expenses in relation to the discontinuance of seven ‘Kaya Skin’ clinics. This case involves the accounting standards applied to the assessment year 2010-11 and the way liabilities are crystallized and accounted for during the discontinuation of business operations.

The ruling

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